this bank, was arrested, in 1808, and an indictment drawn against him; but the bill was not found.[1]
Connecticut.—The bonds of the United States owned by the State having been paid, in 1803, the Legislature voted to put the amount in banks which would receive it as stock-deposit; that is; it was to be deposited, but to get the rate of dividend instead of the rate of interest, be withdrawable, but not transferable as stock.
The shareholders of the Hartford Bank voted, in 1806, that they would receive subscriptions from religious societies or school corporations on similar terms to those here provided for the State. The following year the Legislature authorized an increase of the capital stock of this bank to one million dollars, with the provision that "the bank should be open at all times to subscriptions of shares from the funds of schools, ecclesiastical societies, or other incorporations for charitable purposes in the State, without any advance thereon, and with the right, on the part of the privileged associations, to withdraw their moneys on giving six months' notice. Whenever the holdings of any favored society reached $50,000, the full capital of one million dollars having been otherwise filled, it was entitled at the annual meetings to the choice of a director. These shares were not transferable." In 1809 the bank petitioned the Legislature to relieve it from the necessity of receiving these subscriptions. In 1816 it had $212,800 of such non-transferable shares.[2] This arrangement became customary in Connecticut, and was introduced into nearly all the bank charters which were granted before the civil war. The Connecticut charters, also, as a rule, did not run for a prescribed length of time, but they contained a clause allowing the Legislature to amend or repeal them.
New York.—In 1799 the Manhattan Water Company was chartered in New York City with a capital of two million dollars, and with power to use any part of the capital not required for water-works in any way "not inconsistent with the laws and Constitution of the United States or of the State of New York." Aaron Burr is mentioned as the inventor and chief promoter of this charter. When the bill came before the Council of Revision, the Chief Justice objected that, under the clause quoted, the corporation might engage in trade. No one seems to have noticed that the corporation might engage in banking, which was the real intention. In excuse of this subterfuge it was alleged that no Charter for a republican bank could then have been obtained. The charter was perpetual, but in 1808 the company was allowed to sell or lease its water-works to the city, and to use all its capital for banking. The charter was to expire thirty years from the date of such sale or lease. The State might subscribe for one thousand shares of the stock, and the Recorder of the City of New York was made a director ex officio.[3] The right of this company to do a banking business was tried and affirmed by the Supreme Court of the State.[4]
